Government response to the Independent Review into the integrity of the subclass 457 programme

Media Release: 18 March 2015, source:

We expect the Australian government accepted recommendations will be implemented in the following 6 months.

Summary of the most interesting changes:

  • Standard Business Sponsors will be approved for five years and start-up business sponsors for eighteen months;
  • the current TSMIT to be retained at $53,900 p.a. but not to undergo any further increases until it is reviewed within two years
  • English language requirement be amended to an average score. For example, in relation to International English Language Testing System, the 457 applicant should have an average of 5 across the four competencies (or the equivalent for an alternative English language testing provider).
  • current training benchmarks to be replaced with an annual training contribution to a government training fund, with the contributions scaled according to size of business
  • rewarding Australian employers who are complying with their sponsorship obligations, by providing them with streamlined processing for their nominations and visa applications
  • greater collaboration between the Australian Taxation Office and the Department of Immigration and Border Protection to uphold the integrity of the subclass 457 programme by cross checking to ensure that employers are paying overseas workers the correct wages and entitlements
  • criminalising fraudulent activity in the subclass 457 programme where it will be a criminal offence for sponsors to accept payment from visa applicants for a migration outcome
  • 457 visa holders to be required to work for at least two years in Australia before transitioning to the Employer Nomination Scheme or Regional Sponsored Migration Scheme, and that consideration to be given to the amount of time required with a nominating employer being at least one year.

Full list of recommendations - see below:

RecommendationGovernment Response
1.1 That, in lieu of the existing Ministerial    Advisory Council on Skilled Migration, a new tripartite ministerial advisory    council, which is not necessarily prescribed in legislation, be established    to report to government on skilled migration issues. Supported in principle
1.2 That the new ministerial advisory council be    supported by a dedicated labour market analysis resource. Supported
2. Acknowledging that, as the OECD has pointed out,    employer-conducted labour market testing is not "fully reliable", and in the    Australian context has proven ineffective, that the current legislative    requirement for labour market testing be abolished. Noted
3.1 That the Consolidated Sponsored Occupations List    (CSOL) be retained as a list of occupations which are at Skill Level 3 and    above, and that the CSOL should be able to be amended by two means: first,    the addition of skilled occupations which can be shown to exist in the    community but which may not be on the ANZSCO list; and, second, the    refinement of the CSOL in cases where there may be integrity or    appropriateness concerns. Any occupations not on the list, which are usually    referred to as semi-skilled, may be addressed as part of the Labour Agreement    regime. Supported
3.2 That the new ministerial advisory council provide    advice on those occupations where some concerns exist and recommend    additional requirements or limitations on occupations and/or regions. Supported
4. That the market rate framework continue to    operate as a core component of the 457 programme, but that the earnings    threshold above which there is an exemption from the need to demonstrate the    market rate should be aligned with the income level above which the top    marginal tax rate is paid       (currently at $180,000). Supported
5.1 While there is an argument for abolishing the    Temporary Skilled Migration Income Threshold (TSMIT), that it    nevertheless  be retained to allow for    streamlining within the wider programme, and that concessions to the TSMIT be    afforded under Labour Agreements, Enterprise Migration Agreements and    Designated Area Migration Agreements, as appropriate. Supported
5.2 That the current TSMIT be retained at $53,900    p.a. but that it not undergo any further increases until it is reviewed    within two years. Supported
5.3 That the two roles currently performed by TSMIT    (that is, acting as a determination of the eligibility of occupations for    access to the scheme and as an income floor) be more clearly articulated in    the 457 programme, and that consideration be given to accepting the    eligibility threshold as up to 10% lower than the TSMIT. Supported
5.4 That the government give further consideration to    a regional concession to the TSMIT, but only in limited circumstances where    evidence clearly supports such concession. Supported
5.5 That in circumstances where the base rate of pay    is below the TSMIT, the current flexible approach adopted by the department,    taking into account guaranteed annual earnings to arrive at a rate that meets    the minimum requirement of TSMIT be continued and made more visible to users    of the programme and their professional advisors. Supported
6.1 That the current training benchmarks be replaced    by an annual training fund contribution based on each 457 visa holder    sponsored, with the contributions scaled according to size of business. Supported*
6.2 That any funding raised by way of a training    contribution from sponsors of       457 visa holders be invested in:

  1. training    and support initiatives, including job readiness, life skills, and outreach programmes    for disengaged groups, particularly youth who have fallen out of the school    system
  2. programmes    allowing employers to take on apprentices/trainees from target groups,    including Indigenous Australians and those in rural and regional areas
  3. mentoring    programmes and training scholarships aimed at providing upskilling    opportunities within the vocational training and higher education sectors    that address critical skills gaps in the current Australian workforce. Target    sectors include those industries, such as nursing and the IT sector, that    rely heavily on 457 workers
  4. training    and support initiatives for sectors of critical national priority.            Target sectors include industries experiencing significant increase in labour    demands, such as the aged care and disability care sectors.
6.3 That funds raised through the training    contribution be dedicated to this training role and that the government    reports annually on how these monies are spent by the Department of Industry. Supported
6.4 That there be a new sponsor obligation to ensure    that the cost to the sponsor of the training contribution cannot be passed    onto a 457 visa holder or third party. Supported
7.1 That the English language requirement be amended    to an average score.       For example, in relation to International English Language Testing System,       the 457 applicant should have an average of 5 across the four competencies       (or the equivalent for an alternative English language testing provider). Supported
7.2 That greater flexibility be provided for    industries or businesses to seek concessions to the English language    requirement for certain occupations on a case by case basis, or under a    Labour Agreement, Enterprise Migration Agreement or Designated Area Migration    Agreement, as appropriate. Supported
7.3 That consideration be given to alternative    English language test providers. Supported
7.4 That consideration be given to expanding the list    of nationalities that are exempt from the need to demonstrate they meet the    English language requirement. Not Supported
7.5 That instead of the current exemption which    requires five years continuous study, five years cumulative study be    accepted. Supported
8.1 That there be targeted training for    decision-makers in relation to assessment of the genuine position    requirement. Supported
8.2 That before decision-makers refuse a nomination    on the basis of the genuine position requirement, the sponsor be invited to    provide further information to the decision-maker. Supported    in principle
9. That the government should explore how skills    assessment could more appropriately recognise a visa applicant's experience. Supported
10.1 That Standard Business Sponsors should be    approved for five years and start-up business sponsors for eighteen months. Supported
10.2 That as part of the government's deregulation    agenda, the department should develop a simplified process for sponsor    renewal. Supported
10.3 That the department considers combining as many    sponsorship classes as possible. Supported
10.4 That when more detailed information is available,    the department should investigate the alignment of overseas business and    Labour Agreement sponsorship periods with the general Standard Business    Sponsorship approval period. Supported
10.5 That the timeframe for the sponsor to notify the    department of notifiable events as set out in legislation should be extended    to 28 days after the event has occurred. Supported
10.6 That the department should explore options that    would enable the enforcement of the attestation relating to    non-discriminatory employment practices. Supported
10.7 That it be made unlawful for a sponsor to be paid    by visa applicants for a migration outcome, and that this be reinforced by a    robust penalty and conviction framework. Supported
11. That the government should review the fee    structure, especially for secondary visa applicants and visa renewal    applications. Supported
12.1 That sponsors be required to include as part of    the signed employment contract:

  1. a summary of visa holder rights prepared by    the department, and
  2. the Fair Work Ombudsman's Fair Work    Information Statement.
12.2 That improvements be made to both the    accessibility and content on the department's website specific to 457 visa    holder rights and obligations, and utilising the department's significant    online presence more effectively to educate 457 visa holders on their rights    in Australia. Supported
13.1 That consideration be given to creating    streamlined processing within the existing 457 programme as a    deregulatory measure. To maintain programme integrity, streamlining should be    built around risk factors including business size, occupation, salary and    sponsor behaviour. Supported*
13.2 That should the recommended nomination and visa    streamlining outlined in this report be implemented, the department should    investigate a redefined accredited sponsor system. Current accredited    sponsors should retain their priority processing benefits until their    sponsorship ceases; however, no further sponsors should be afforded    accredited status until a new system is implemented. Supported
14.1 That Labour Agreement negotiation times be    significantly improved to enable a demand-driven and responsive pathway for    temporary migration, where the standard 457 programme arrangements are not    suitable. Supported
14.2 That to enable the Labour Agreement pathway to be    more open and accessible for additional industry sectors, consideration be    given to the development of other template agreements that will address    temporary local labour shortages in industries of need. Supported
15.1 That 457 visa holders be required to work for at    least two years in Australia before transitioning to the Employer Nomination    Scheme or Regional Sponsored Migration Scheme, and that consideration be    given to the amount of time required with a nominating employer being at    least one year. Supported
15.2 That consideration be given to reviewing the age    restriction on those 457 visa holders transitioning to the Employer    Nomination Scheme or Regional Sponsored Migration Scheme. Supported
15.3 That consideration be given to facilitating    access for partners of primary sponsored 457 visa holders to secure permanent    residence under the Temporary Residence Transition stream. Supported
16. That consideration be given to the allocation of    more resources to programmes aimed at helping sponsors understand and comply    with their obligations, whether those programmes are delivered directly to    sponsors or through the migration advice profession. Supported in principle
17. That greater priority be given to monitoring, and    that the department continue to enhance its compliance model to ensure those    resources are applied efficiently and effectively. Supported
18.1 That there be greater collaboration between the    department and the Australian Taxation Office to uphold integrity within the    457 programme and minimise the burden on employers. Supported
18.2 That a change to 457 visa conditions be    introduced to place an obligation on the visa holder to provide the    department with their Australian tax file number. Supported
19.1 That the Fair Work Ombudsman's current    complementary role in monitoring compliance and referral of findings to the    department for action should continue. Supported
19.2 That the department should provide information in    real time that is both current and in a format compatible with those of the    Fair Work Ombudsman. Supported
20.1 That the department monitor decisions of the Fair    Work Commission, so as to determine if sponsors have breached obligations or    provided false or misleading information. Supported
20.2 That the department require sponsors, when    lodging a new nomination application to certify that there has been no change    to the information provided to the department in relation to whether the    business or an associated entity has been subject to "adverse information" as    that term is defined in the legislation. Supported
21.1 That dedicated resourcing be made available to    the department to enable the investigation and prosecution of civil penalty    applications and court orders. Supported*
21.2 That the department disclose greater information    on its sanction actions and communicate this directly to all sponsors and the    migration advice profession as well as placing information on the website. Supported
22. That the department investigate the feasibility    of system improvements that facilitate greater linkages with information held    by other government agencies. Supported in principle

* Supported subject to  further consultation​​​​​​

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